Stakeholders react: 'These are suicide rates'
YARMOUTH, Maine – The steep cuts that CMS plans to implement as part of Round 2 of competitive bidding underscore the fatal flaws in the program, say industry stakeholders.
"The economists have said that it's bid low or die, and I think these payment amounts reflect that," said Cara Bachenheimer, senior vice president of government relations for Invacare.
Starting July 1, Round 2 payment amounts for certain HME will be, on average, 45% lower than the current fee schedule in 91 cities. For a separate national mail-order program, they will be, on average, 72% lower.
Stakeholders believe that even the largest HME providers can’t remain profitable under those payment amounts.
"There's no one I'm aware of who's making more than 45% margins on their business,” said Wayne Stanfield, president and CEO of NAIMES.
Speculation varies on the consequences of the payment amounts. Some foresee greater consolidation, with smaller companies closing their doors. Others say the situation is more dire than that.
"These are suicide rates," said John Gallagher, vice president of government affairs at VGM. "If they're implemented, I don't see more sales and acquisitions—I see complete collapse."
Stakeholders hope the steep cuts will serve as a wake-up call—for providers to push a market-pricing program to replace competitive bidding (they expect a bill to be introduced in the coming weeks), and for lawmakers to stand behind MPP en masse (94 co-sponsored a previous bill last year).
"If you look at the provisions of MPP, it does fix some of the fundamentally flawed areas within competitive bidding," said Seth Johnson, vice president of government affairs at Pride Mobility, said. "My hope is that these prices will serve as a shot in the arm to take action to stop this program."
Stakeholders also hope providers will join in pressuring CMS to be transparent about how it came to the new payment amounts and to come clean about the impact of competitive bidding on beneficiaries.
"We have to tell them passionately why this program is destroying patient access to care by destroying the industry that provides it," Stanfield said.